Principles for responsible carbon finance for clean cooking endorsed by MCFA

At a high-level summit in Paris on 14 May 2024, new principles for responsible carbon finance for clean cooking were announced to support the urgent scale-up of clean cooking initiatives in Africa and globally.

At the Summit, the significant efforts made to date were acknowledged, but it is evident that much more needs to be done. A joint declaration, signed by several countries, international organisations, civil society, and companies, was made in connection with the Summit on Clean Cooking in Africa, co-chaired by: H.E. Samia Suluhu Hassan, President of the United Republic of Tanzania, H.E. Jonas Gahr Støre, Prime Minister of Norway, Dr Akinwumi A. Adesina, President of the African Development Bank, and Dr Fatih Birol, Executive Director of the International Energy Agency.

“Carbon finance is a key component of the Modern Cooking Facility for Africa. In connection to today’s Summit on Clean Cooking in Africa, Nefco hereby endorses the Principles for Responsible Carbon Finance for Clean Cooking to drive actions to improve the integrity of carbon credits, transparency of information, fairness in revenue sharing throughout the value chain and long-term sustainability of local clean cooking markets, including enabling greater participation of clean cooking companies in carbon markets,” stated Ash Sharma, Head of MCFA, and Vice President for Special Funds at Nefco.

The Modern Cooking Facility for Africa (MCFA) endorses these principles, and as part of this commitment, Nefco, in its capacity as Fund Manager for MCFA, will:

• Join a working group, convened by an International Energy Agency (IEA), with a pledge to mobilise public and private finance by supporting the generation of high-integrity carbon credits from clean cooking activities. This will be implemented through a concrete action plan with a commitment to engage in further dialogues to make progress on current challenges.

• Endorse the development of the new clean cooking carbon project methodology, currently being developed by the Clean Cooking & Climate Consortium, led by the Clean Cooking Alliance (CCA), for all cooking projects under Article 6.2 and Article 6.4 of the Paris Agreement, as well as the Voluntary Carbon Market.

This methodology aims to incorporate the latest science, increasing the requirements for substantiating realistic input parameters: conservative default values and flagged upper-bounds incentivised direct measurements. As a result, it is likely to generate the most realistic emissions reductions to date, reduce integrity risks, incentivise best practices and increase consistency across standard bodies and throughout the ecosystem.

• Commit to working towards a widespread application of digital monitoring, reporting and verification (MRV) and the improvement of data collection and utilisation from clean cooking activities.

Carbon finance has been an important source of funding for clean cooking companies in recent years, and it is expected that the adoption of the new principles will continue with the growth of voluntary markets, national carbon markets and credits sales related to the Paris Agreement Article 6.

With modern energy technologies, fuel usage for cooking can be measured for all main fuel types, including electricity, ethanol and biogas. Methodologies now exist for certifying CO2 emissions for modern cooking appliances, which leverage usage data to improve and simplify emissions measurements and reporting requirements, allowing for a more efficient process for calculating emissions reductions and delivering cost savings, especially for monitoring, reporting and verification (MRV).

MCFA recognises that upfront costs represent a barrier to accessing carbon finance, which can be overcome through the provision of technical assistance to help clean cooking service providers access or set up their own carbon credit programmes.

The Summit organised by the International Energy Agency (IEA), brought together over 1000 delegates, from governments, private sector, development partners, international organisations, philanthropies, and civil society, all driven by the shared objective of making 2024 a pivotal year for achieving universal access to clean cooking. It marked the largest-ever gathering exclusively on clean cooking, drawing participation from 55 countries, represented by 4 Head of Government and 23 Ministers.

Further information about the Summit:

Principles for responsible carbon finance published by Clean Cooking Alliance

Read the International Energy Agency’s press release about the Summit

Read the Clean Cooking Declaration available on International Energy Agency’s website

Watch the recording from the Summit

For further information, please contact:

Ash Sharma*, Head of Modern Cooking Facility for Africa, Nefco
ash.sharma@nefco.int, +358 10 618 06 53

Kari Hämekoski, Senior Programme Manager, Modern Cooking Facility for Africa, Nefco
kari.hamekoski@nefco.int, +358 10 618 0660

*As Head of MCFA, Ash Sharma is part of the Clean Cooking Alliance’s Responsible Carbon Finance Advisory Council. Sharma was formerly the Co-Chair of the Working Group on Market Access and Competition as part of the 2023 Responsible Carbon Finance for Clean Cooking Initiative.

About Nefco

Nefco – the Nordic Green Bank – is an international financial institution based in Helsinki, Finland, owned by the five Nordic countries, focusing on environmental and climate investments for concrete actions to accelerate the green transition. Nefco also manages external funds in the climate and energy space. It is accredited by the European Union and the Green Climate Fund and is the Facility Manager for the Beyond the Grid Fund for Africa, a EUR 126 million multi-donor results-based financing facility funded by Denmark, Germany, Norway, Sweden and USAID. Read more on www.nefco.int

Photo: Announcement of the new principles in connection to the clean cooking Summit on 14 may 2024 – Clean Cooking Alliance (CCA)